Government welcomes passing of biggest budget

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The government welcomed parliament approving the 2023 state budget, the last tabled by the 10-year administration of outgoing President Nicos Anastasiades.

The President extended his gratitude to most parliamentary parties for voting in favour of the budget.

The budget was approved by 29 votes in favour and 24 against.

“It (the budget) is increased but also in surplus; it strengthens the welfare state and economic activity and includes important development projects, leading to the Cyprus of Tomorrow”, Anastasiades Tweeted.

Finance Minister Constantinos Petrides also welcomed the budget’s safe passage.

“The budget is not myopic; it looks to the future, giving special tools to tackle the short-term crises we are facing,” Petrides said.

As he noted, the budget aims at future challenges for green and sustainable growth and digital transformation without burdening future generations.

Noting that fiscal planning would be different if it weren’t for the challenges of the next two years, Petrides wished the next government would implement the budget along with reforms.

“A budget is never enough for one country to go forward, structures should change, and reforms should be implemented”.

The budget provides for general government revenue of €11.76 bln and expenditure amounting to €11.29 bln.

The budget features a fiscal surplus of €0.46 bln, corresponding to 1.7% of GDP, while primary (excluding debt servicing expenditure) is estimated a 3% of GDP.

According to the budget’s macroeconomic scenario, GDP growth is estimated to slow to 3% in 2023 from a projected 6% this year.

It will grow by 3.3% and 3.2% in 2024 and 2025, respectively.

Inflation is estimated to decline to 3% in 2023 from a projected 7.7% in 2022.

The budget provides an increase of 12% in development projects and increased social protection spending, while debt servicing expenditure is estimated to drop by €500 mln.

Primary spending in 2023 is expected to mark an increase of €554 mln, while social transfers are estimated to increase by 4%.

Parliament froze €100 mln in state expenditure, including a €10 mln budget for the island’s audio-visual incentive scheme.

MPs requested either the House committee of financial and budgetary affairs written approval before their disbursement or the submission of a written briefing.